KATHMANDU UNIVERSITY

Marks Obtained:
BBA and BBIS
End-Semester Examination
February – June 2015 Session
August 2015

SUBJECT : MAS 310 – Operations Management TIME : 10 min

YEAR : III SEMESTER : II
FULL MARKS: 10

Examination Roll No: __________________ Registration No: ___________________

SECTION “A”
[10 Q x 1 = 10 Marks]

Encircle the most appropriate answers from the given choices.

1. Which of the following is an example of competing on quick response?

a. A firm produces its product with less raw material waste than its competitors
b. A firm offers more reliable products than its competitors.
c. A firm's products are introduced into the market faster than its competitors’ products.
d. A firm's research and development department generates many ideas for new products.

2. Which of the following statement is not true regarding Quality Function Development (QFD)?
a. It determines what will satisfy the customers.
b. It is used in the growth stage of the product life cycle.
c. It translates customer desires into target design.
d. It is used to determine where to deploy quality efforts.

3. Which of the following statement is true regarding ‘assignable variation”?

a. It is to be identified and eliminated.
b. It is the same as random variation.
c. It is variation that cannot be traced to a specific cause.
d. It a sign that the process is in control.

4. Which of the following strategy can be used when demand is less than capacity?
a. Aggressive marketing.
b. Produce complementary product.
c. Lenghten the lead times.
d. Increase product price.

5. Which of the following is categorized as tangible cost in location decision?

a. Climatic condition
b. Taxes
c. Availability of public transportation
d. Attitude of local people
6. Which of the following business would not be best implementing a product-oriented layout?
a. Steel-making
b. Sugar factory
c. A boutique
d. Electrical appliances industry

7. Which of the following is not an advantage of the ‘few suppliers’ strategy in supply chain
management?
a. Suppliers' willingness to participate in JIT systems
b. Trust
c. Vulnerability of trade secrets
d. Creation of value by allowing suppliers to have economies of scale

8. A product costs $1,000, and the annual holding cost is 20 % of the unit price. If the annual demand is
10,000 units, and the order cost is $120 per order. What is the approximate economic order quantity?
a. 11
b. 35
c. 70
d. 110

9. Given the following product structure tree, what will be the gross requirement of element E if the
demand of A 100?

a. 100
b. 200
c. 300
d. 600

10. Which of the following dispatching rules tends to minimize job flow time?
a. First come first served
b. Shortest processing time
c. Earliest due date
d. Longest processing time
 KATHMANDU UNIVERSITY
BBA and BBIS
End-Semester Examination
February – June 2015 Session
August 2015
SUBJECT : MAS 310 – Operations Management TIME : 2 Hrs. 50 min
YEAR : III SEMESTER : II
FULL MARKS: 40
SECTION “B”
[6 Q × 4 = 24 Marks]
Attempt any SIX questions.
1. One reasons productivity improvements in service are so low is because it involves customers
interactions in design, delivery or both. Argue about customer's participation in the design of services.
Provide relevant examples to support your answer.
2. Ethics and environmentally friendly processes have become an important issue in the production
management. Give your opinion on its implementation in Nepali context.
3. Bulwhip effect is a phenomena in supply chain that occurs when orders are relayed from retailers to
wholesaler to manufacturers, with fluctuations increasing at each step in the sequence. What could be
the reason of this fluctuation? How can it be reduced? [2+2=4]
4. A toy factory was designed to produce 600 dolls per day but is limited to make only 500 per day
because of the time needed to change the tools between styles of the dolls. Last month, it produced only
420 due to labor strike. What is the utilization and efficiency of the factory? How would you distinguish
between designed capacity and effective capacity? [2+2=4]
5. An assembly line is to operate eight hours a day with a desired output of 240 units per day. The
following table contains information on this product’s task time and precedence relationship. Draw the
precedence diagram, cycle time, and balance this assembly line using the most following task heuristic.
What is the efficiency of this line balance?
Task Task time Immediate
(second) predecessor
A 60 -
B 80 A
C 20 A
D 50 A
E 90 B, C
F 30 C. D
G 30 E, F
H 60 G
6. After completing undergraduate you want to start new business of a coffee shop in Kathmandu Valley.
How would you choose the best location for your business(make sure you mention which method of
location selection you will use)?
7. The Rocky Mountain Arsenal, formerly a chemical warfare manufacturing site, is said to be one of the
most polluted locations in the US. Clean up of chemical waste storage basins will involve two
operations in sequence: 1) Drain and dredge basin, 2) Incinerate materials. The time required to perform
these two operations in each basin is given below.
Storage basin Dredge Incinerate
(days) (days)
A 3 1
B 4 5
C 3 2
D 6 3
E 1 2
F 3 6
 G 2 4
H 3 4

Find the schedule to clean up the storage basin. Determine also the makespan and the total idle time.

SECTION “C”
[2 Q × 8 = 16 Marks]
Attempt any TWO questions.

8. The Students Council at State University purchases shirts with college name and logo from a
vendor. The vendor sells the shirts for $38/piece. The cost for the Students Council for placing
an order is $120, and the annual carrying cost is 25% of the cost of a shirt. The treasurer has
estimated that 1700 shirts will be sold during the year. The vendor has offered the following
discount schedule:
Order size Discount (%)
1 – 299 0%
300 – 499 2%
500 – 799 4%
800 - above 5%
What is the optimal order quantity given this quantity discount information?

9. United Air opened its doors in December 2001 with its headquarters and the only hub in
Birmingham. It was started and managed by two former pilots, David Douglas and Michael
Hanna. One of United Air’s top competitive priorities is on-time arrivals, which means that any
arrival must be within 20 minutes on the scheduled time. Hanna decided to personally monitor
United Air’s performance. Each week for the past 20 weeks, he checked a random sample of
100 flight arrivals for on-time performance. The table below contains the number of flights that
did not meet Japer Air’s definition of on time: [5+2+1=8]

Sample 1 2 3 4 5 6 7 8 9 1
(week) 0
Late flight 2 4 1 4 1 1 1 9 1 0
0 3 1

Sample 1 1 1 1 1 1 1 1 1 2
(week) 1 2 3 4 5 6 7 8 9 0
Late flight 3 4 2 2 8 2 3 7 2 3

i. Using 95% confidence level (z=1.96) construct an appropriate control chart.

ii. What is your comment about the quality service of United Air?
iii. Which operation strategy would be best representing the operation strategy of United Air?

10. The management at the Davis Corporation has determined the following demand schedule (in units).
Month 1 2 3 4 5 6 7 8 9 10
Deman 500 800 100 140 200 160 140 120 100 240
d 0 0 0 0 0 0 0 0

An employee can produce 10 units per month. Each worker is paid $ 2000 per month (regular
production time). HR department of Davis Corporaiton doesn’t allow overtime but subcontract is
possible with the costs of $275/unit.Hiring cost is $2500/person and firing cost is $4000/person.
Holding cost is $20/unit/month. Analyse the following two plans and choose the best one.
Plan A: Use chase strategy by hiring and firing as necessary to meet the forecast demand.
Plan B: Maintain a constant level of workforce and use subcontract whenever necessary.
ANSWERS KEY
MAS 310 – OPERATIONS MANAGEMENT

1. C
2. B
3. A
4. A
5. B
6. C
7. C
8. D
9. D
10. B

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Question Framework
Section A Multiple choice
1. Learning Unit 1
2. Learning Unit 2
3. Learning Unit 3
4. Learning Unit 4/5
5. Learning Unit 6
6. Learning Unit 7
7. Learning Unit 8
8. Learning Unit 9
9. Learning Unit 10
10. Learning Unit 11

Section B Short answer questions

1. Learning Unit 2
2. Learning Unit 4
3. Learning Unit 8
4. Learning Unit 5
5. Learning Unit 7
6. Learning Unit 6
7. Learning Unit 11

Section C Long answer questions

8. Learning Unit 9
9. Learning Unit 3 & 1
10. Learning Unit 10